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Thursday, 19 August 1993
Page: 329

Senator KEMP (3.05 p.m.) —by leave—I move:

  That the Senate take note of the answer given by the Minister for Foreign Affairs (Senator Gareth Evans), in response to a question without notice asked by Senator Kemp this day in relation to the ratio of taxation to gross domestic product.

I wish to respond to the astonishing comments that Senator Gareth Evans made after a bit of quick advice from Senator McMullan, who popped over on the run. The trouble with taking advice on the run is that one is liable to get it wrong, and that is precisely what Senator Gareth Evans did. I was using the formulation used by Senator Gareth Evans and by the Prime Minister (Mr Keating) in previous question times and that is, what happens when these tax changes that the government has announced wash through the system. The government's budget papers show that, at the end of the day, the ratio of tax to GDP will rise to 23.5 per cent. Of course, some of these tax changes do not apply until part of the way through the year. Everyone now concedes that the Prime Minister has given a somewhat inflated estimate overriding Treasury of what the GDP will be in year one. That was the figure which Senator Gareth Evans mentioned but which was not relevant to the question I put.

  What is interesting to the taxpayer—and what the government has tried to justify since the budget—is that taxes will not rise above what Senator Gareth Evans has described as current levels, which he then goes on to define—

Senator Gareth Evans —Roughly current levels. Quote him accurately.

Senator KEMP —Senator Gareth Evans has had his go; I am going to have my go. He has defined them over the past eight years. The government's own budget papers show that after all these tax changes which are imposed this year wash through the system, on the government's own forecasts, the ratio will rise to 23.5 per cent. That is precisely what I said in my question to Senator Gareth Evans.

  The problem today was that Senator Gareth Evans was caught out seriously. He defined the promise in terms of the tax to GDP ratio and we accepted the terms in which he defined that promise. Then we looked at the government's budget papers and found that the tax to GDP ratio rises over the term of this government as a result of these tax changes. Because of the poor advice that Senator Gareth Evans has taken or because of the lack of work that he applies to his job, he has put the Prime Minister straight in the soup.

  Therefore, I think that after all this is over, Senator Evans should go and make it clear to Mr Keating that he and his colleagues and the community are not going to accept these broken promises. These innumerable taxes, which Senator O'Chee so well explained to the Senate today, are quite contrary to the promises that the government made during the election campaign. After these have washed through the system, as Senator McMullan will now tell us, the tax to GDP ratio will rise from the level that Mr Keating was talking about to 23.5 per cent on the government's figures.